The European Commission recently unveiled a proposal that will allow the European Union to protect its trade interests despite the paralysis of the multilateral dispute settlement system in the World Trade Organization (WTO). To further increase the focus on compliance and enforcement of the EU’s trade agreements, the Commission created the position of Chief Trade Enforcement Officer.
President of the European Commission, Ursula Von Der Leyen, said, “A stronger Europe in the world implies efficient EU leadership on global trade and appropriate powers to ensure that international trade rules are respected. For that reason, I start my mandate by taking swift action to strengthen our trade toolbox. The proposals will let us defend our interests in these particularly uneasy times for international trade. As many European jobs are at stake, the EU needs to be equipped to ensure that our partners respect their commitments and that’s what this proposal aims for.”
Commissioner for Trade, Phil Hogan, said, “This is a critical moment for multilateralism and for the global trading system. With the Appellate Body removed from the equation, we have lost an enforceable dispute settlement system that has been an independent guarantor that the WTO’s rules are applied impartially. Whilst we seek to reform the WTO and re-establish a well-functioning WTO system, we cannot afford being defenceless if there is no possibility to get a satisfactory solution within the WTO. The amendments we propose will allow us to defend our companies, workers and consumers, whenever our partners do not play by the rules.”
The proposal to amend the existing Enforcement Regulation comes as a direct reaction to the blockage of the operations of the WTO Appellate Body. The current regulation – a basis under EU law for adopting trade countermeasures – requires that a dispute go all the way through the WTO procedures, including the appeal stage, before the Union can react. The lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations and escape a binding ruling by simply appealing a panel report.
The Commission’s proposal will enable the EU to react even if the WTO is not delivering a final ruling at the appellate level because the other WTO member blocks the dispute procedure by appealing into the void.
This new mechanism will also apply to the dispute settlement provisions included in regional or bilateral trade agreements to which the EU is party. The EU must be able to respond resolutely in case trade partners hinder effective dispute settlement resolution, for instance, by blocking the composition of panels.
In line with the Political Guidelines of President Von Der Leyen, the Commission is further reinforcing the Union’s tools to focus on compliance and enforcement of the EU’s trade agreements and created the post of Chief Trade Enforcement Officer that will be filled in early 2020.
Ensuring the respect of the commitments agreed with other trade partners is a key priority of the Von Der Leyen Commission. The EU is therefore increasing its focus on enforcing its partners’ commitments in multilateral, regional and bilateral trade agreements. In so doing the Union will rely on a suite of instruments. The proposal presented will now be subject to validation by the European Parliament and the EU Member States in the Council in a normal legislative process.